"Warehouse club members tend to be higher income households with kids — the type of shoppers that have huge lifetime value to retailers."

Assuming that this is true, I think this is a brilliant, long-tail, idea from Amazon. If the kids get accustomed to seeing Amazon boxes full of stuff arrive every week, when they move out on their own they probably will also buy from Amazon. Similar to computer manufacturers (e.g. Apple, Microsoft) giving educational discounts to schools/students. It's hard to know if this implementation will work but I would start worrying if I were Costco/Sam's. Amazon has shown that they do find innovative approaches to markets. If this approach doesn't work they'll come out that will later on.